Whistleblower

April 11, 2017

There have been boatloads of jokes over the past couple days about those twin PR disasters, Pepsi and United. “Do they share the same PR firm?” “If only Kendall Jenner was on that United Airlines flight with an ice cold Pepsi this would have never happened.” (Not to get all serious for a minute, but check out this Atlantic article about how, in part, airlines get away with systemic customer abuse because they are “sheltered from … litigation” due to forced arbitration clauses and class action waivers.)

Obviously without videos, it’s unlikely either company would have suffered any major PR damage. There are plenty of other corporate abuses occurring every day that have generally escaped the same PR fate - and the lack of video may be one reason why.

…to dismiss claims that one of its subsidiaries retaliated against a former employee whose whistleblower lawsuit led to an $18 million settlement with the U.S. Justice Department.

Melayna Lokosky, a former sales representative for J&J unit Acclarent, said she was unlawfully fired in 2011 after raising questions internally about the off-label promotion of a medical device called the Relieva Stratus MicroFlow Spacer, or Stratus.

Here’s some of what we know about Melanyna Lokosky. She was “a sales rep for Acclarent [a medical device company] and was making $250,000 a year." But, "In 2011, she decided she would blow the whistle on the company’s fraud." As a result of her efforts, “the former CEO and the former VP of sales of Johnson & Johnson unit Acclarent, Inc. … were convicted by a federal jury in Boston in connection with distributing adulterated and misbranded medical devices.” What’s more, “the company paid $18 million to resolve allegations that the company caused health care providers to submit false claims to Medicare and other federal healthcare programs by marketing its sinus spacer product for use as a drug delivery device without U.S. Food and Drug Administration (FDA) approval of that use.”

J&J is apparently now arguingnot that she wasn't retaliated against, but that she doesn’t get False Claims Act legal protections because she “raised issues about regulatory violations, not the False Claims Act itself.” This is even though her whistleblowing led the the company to pay $18 million for filing false claims. C'mon.

Mind you, this comes after a year so chock full of J&J disasters that Bloomberg felt compelled to put it all together in an article called, “Why Johnson & Johnson Would Like to Forget 2016: QuickTake Q&A.” For example:

Johnson & Johnson had a year for the record books -- it lost six of 2016’s seven largest jury verdicts in the U.S. over product defect claims. This year may be no better. The company is facing at least 17 trials in state and federal courts in the U.S. over hip implants, talcum powder, pelvic mesh, an anti-psychotic drug and a blood thinner. And beyond these trials, there are tens of thousands more potential claims over those five products.

As the Atlantic put it, “the United video serves as a stark metaphor, one where the quiet brutalization of consumers is rendered in shocking, literal form.” Too bad not every corporate scandal is caught on camera. At least not yet.

April 09, 2015

The shocking shooting of Walter Scott by South Carolina police officer Michael Slager has, as the New York Timesput it, “reignited the debate” over video cameras and policing. They write,

Nothing has done more to fuel the national debate over police tactics than the dramatic, sometimes grisly videos: A man gasping “I can’t breathe” through a police chokehold on Staten Island, a 12-year-old boy shot dead in a park in Cleveland. And now, perhaps the starkest video yet, showing a South Carolina police officer shooting a fleeing man in the back.

People lie. Corporations lie. Videos don’t lie. And Michael Slager isn’t the only one who found this out recently. We're talking to you, Chevron.

First some background. Chevron has been engaged in some despicable acts in northern Ecuador:

Chevron (formerly Texaco) deliberately dumped billions of gallons of toxic wastewater and spilled roughly 17 million gallons of oil ("cost-cutting measures") in the rivers and streams of the once-pristine forest. The consequence: a severe public health crisis amongst the indigenous people and farmers of the region. Cancer, birth defects, disease, and poverty for those unlucky enough to live above an American oil company's underground rivers of liquid gold.

A human rights attorney who sued them, Steven Donziger, was then sued by Chevron for "racketeering". Wrote longtime rainforest activist Trudie Styler, who had the “the unfortunate opportunity” of watching (along with husband Sting) this RICO case proceed against her friend, Mr. Donziger:

Filed under the RICO statute -- designed originally to prosecute organized crime syndicates -- Chevron's racketeering lawsuit is the oil giant's alarming and cynical attempt to destroy a two decades-long effort to hold the company accountable. And tragically, they have succeeded.

Instead of owning up to its grave responsibility in Ecuador, Chevron instead has spent millions of dollars creating what appeared to me a modern Kafkaesque drama in the courtroom, where suddenly the victims of Chevron's contamination in Ecuador have become the accused, and the polluter has become the victim; an absurd theatre where justice has been turned on its head.

Incredibly, a New York judge “ruled in Chevron's favor, finding Donziger and his team guilty of attempting to extort money from the company and obstructing justice by ghostwriting the Ecuadoran court's judgment.” Perhaps justice is about to be turned right-side up again.

A whistleblower mailed to the environmental group, Amazon Watch, 47 DVDs of internal Chevron videos in April 2011, along with the note, “I hope this is useful for you in the trial against Texaco/Chevron! Signed, a friend from Chevron.” Amazon Watch showed a few of these DVD’s to VICE News and they are now up on YouTube. Writes VICE,

Amazon Watch and Donziger say the video shows footage from sites that were classified in an agreement between Chevron and the Ecuadoran government as completely remediated — that is, already cleaned up.

"The Chevron secret videos speak for themselves," Donziger said in an email to VICE News. "They clearly show Chevron technicians finding massive amounts of contamination at sites the company had previously claimed had been remediated…. Chevron should be ashamed of its behavior, which our team considers to be not only unethical, but criminal."…

"These videos are Chevron's property, and are confidential documents and/or protected litigation work product," one of Chevron's lawyers wrote in a February 15, 2013 letter to Donziger's attorneys. "Chevron demands that you promptly return the improperly obtained videos and all copies of them by sending them to my attention at the above address."

Larry Veselka, an attorney for Donziger in the suit, replied that Chevron had long been aware that the defendants were in possession of the videos and had never asked for copies to be handed over.

"Nevertheless, because of your objection, however untimely… we will not post the videos to any publically accessible site tonight," he wrote.

April 02, 2015

If I didn’t know better, I’d think corporate wrongdoers have decided to come clean with the American public about all the harm they’re causing. Every time you turn around, there’s some new “transparency” bill coming out of their lobby shops.

Take translucence-sounding bills like the “Private Attorney Retention Sunshine Act,” peddled to states by the American Legislative Exchange Council, or one called “Transparency in Private Attorney Contracting” (TIPAC). Groups like the U.S. Chamber of Commerce support these bills (e.g., see them praise enactment of one in Arkansas this week), while at the same time working to limit state Attorney General consumer protection authority and oust pro-consumer AG’s. These so-called “sunshine” bills would accomplish the same general goals by, among other things, making it harder for states to find competent counsel in costly and complex cases against corporate lawbreakers, while allowing these same lawbreakers to spend an unlimited amount of resources on their own attorneys. (See more here.) Does anyone really think transparency is the goal here?

Or take the asbestos industry’s FACT Act, aka the "Furthering Asbestos Claim Transparency (FACT) Act of 2015," which we last covered here. As we noted before, the asbestos industry engaged in one of the worst corporate cover-ups in history just so they wouldn’t have to pay compensation to their victims, and they still insist on confidentially when settling cases. So now, they want Congress to pass a bill requiring asbestos trusts to disclose on a public web site private, confidential information about every asbestos claimant and their families, including their names, addresses, where they work, how much they make, some medical information, how much they received in compensation and the last four digits of their social security numbers. At the same time, as noted by an earlier New York Times editorial, the legislation does not ask the companies to do one thing to help the victims, or to disclose any information that could help a claimant with his or her case. The bill would also slow down or stop the process by which the asbestos trusts review and pay claims, so that many victims would die before receiving compensation. Does anyone really think transparency is the goal here?

When it comes to corporate cover-ups, not much has changed. Check out these stories, for example.

Yesterday, the huge government contractor KBR agreed to pay $130,000 to settle with the Securities and Exchange Commission for using employment agreements to muzzle whistleblowers, specifically requiring “witnesses in certain internal investigations interviews to sign confidentiality statements that could have kept them from reporting possible securities-law violations to authorities.” And the problem is not limited to KBR. The Wall Street Journalreported in February,

In recent weeks the agency has sent letters to a number of companies asking for years of nondisclosure agreements, employment contracts and other documents, according to people familiar with the matter and an agency letter viewed by The Wall Street Journal. The inquiries come as SEC officials have expressed concern about a possible corporate backlash against whistleblowers.

Some of these types of documents sometimes include clauses that impede employees from telling the government about wrongdoing at the company or other potential securities-law violations, according to lawyers who handle whistleblower cases and some members of Congress. In some cases, the firms require employees to agree to forgo any benefits from government probes, effectively removing the financial incentive for participating in the SEC program.

Takeda Pharmaceuticals, Asia’s largest drugmaker, has offered to pay more than $2.2 billion to settle claims that it hid the cancer risks associated with its Actos diabetes medicine.…

The sum could close out more than 8,000 lawsuits in federal and state courts that have been launched against Takeda and have lingered for three years. The deal would amount to about $275,000 for each case.

Takeda is accused of covering up signs that Actos can lead to bladder cancer.

Or how about the herbal supplement industry, which has been covering up the fact that its supplements contain lead, mercury, and arsenic instead of actual herbs. Now 14 state AG’s want Congress to investigate.

Corporate lawbreakers and their support systems might want to change their talking points. "Transparency - as long as we've already been caught by law enforcement."

March 05, 2015

You must have a huge internal storage house of patience in order to be a nurse. In a single shift, you may have to handle a belligerent patient, an angry family member, a moody peer or supervisor, and a patient who has several “intestinal accidents.” And that’s all while having to do your “normal” work tasks.

Nurses deserve our eternal respect, that’s for sure. Imagine what they must endure every day. But here’s what they should never have to tolerate: negligence by their own health care institution, which turns a patient nurse into an actual patient.

Last month, NPRreported a story called, “Hospitals Fail To Protect Nursing Staff From Becoming Patients”:

According to surveys by the Department of Labor's Bureau of Labor Statistics (BLS), there are more than 35,000 back and other injuries among nursing employees every year, severe enough that they have to miss work. Nursing assistants and orderlies each suffer roughly three times the rate of back and other musculoskeletal injuries as construction laborers. In terms of sheer number of these injuries, BLS data show that nursing assistants are injured more than any other occupation, followed by warehouse workers, truckers, stock clerks and registered nurses.

Shocking. But it can be even worse. Take the case of Nina Pham, one of two nurses infected with Ebola in October while treating Thomas Eric Duncan at Texas Health Presbyterian hospital. You may recall our earlier coverage of Ebola, and of the National Nurses Union protests over poor protection for nurses treating Ebola patients, including the nurse who blew the whistle specifically on Texas Health Presbyterian hospital. Pham has now filed a lawsuit. If her complaint is true, the hospital’s negligent care of its own nurses was far worse than we knew. According to her story,

She had never been trained to handled infectious diseases, never been told anything about Ebola, how to treat Ebola, or how to protect herself as a nurse treating an Ebola patient. The hospital had never given her any ... training or guidance about Ebola. All Nina knew about Ebola is what she had heard on television.

According to the petition filed with the court, when Pham "asked her manager what she should do to protect herself," one of her superiors "went to the internet, searched Google, printed off information regarding what Nina was supposed to do, and handed Nina the printed paper."…

Before entering Duncan's room, Pham learned what she could from the internet. Ebola is transmitted via body fluids like blood, vomit, and diarrhea, all of which are often produced in excess as the virus progresses. Casual passersby are not likely to have close contact with these substances, but for caretakers and nurses, they are difficult to avoid.

So Pham took several precautions, according to the lawsuit: an isolation gown, a surgical mask, double gloves, and booties. But her hair and neck were left uncovered. The suit also alleges that because the hospital did not give her disposable scrubs or other clothes, "she had to wear the scrubs she wore that first day home, taking out of the hospital clothing that was potentially carrying the virus."

[T]he suit alleges that they faced "circumstances ... that were more like what one would expect in a third-world country." With no designated teams to dispose of all the biohazardous waste that accumulates with an Ebola patient, the nurses tied up Duncan's soiled sheets, where they piled up in the room next to Duncan's. They poured bleach on contaminated materials and wrapped dirty sheets inside of clean ones, according to [her attorney].

This is just what the whistle-blowing nurse said was happening back in October. Pham's complaint goes on, including how the hospital used her as a PR tool without her consent. And of course, how she came close to death herself. See more here.

Some have already written that this case could be a “Landmark For Patient Safety,” although the hospital system appears to be fighting Pham. One issue the hospital system is bound to bring up: whether workers compensation should apply, in which case a lawsuit would be prohibited:

Dallas attorney Michael Stewart, who heads the health care litigation department for the firm Godwin Lewis, said Pham’s claims about Texas Health Resources not properly training its employees or providing proper equipment could fall under workers’ compensation claims. If workers’ compensation applies, Stewart said, it doesn’t matter if the hospital system was negligent.

Stewart said he anticipates “quite a dispute” about whether workers’ compensation applies to just the hospital or the parent company. Even if workers’ compensation claims apply, which would also cover some ongoing health problems, Stewart said Pham must prove, among other things, that Texas Health Resources “totally ignored on purpose” the risk of Ebola and that it was “reasonably foreseeable” that someone with the disease would end up at the hospital.

Charla Aldous, Pham’s attorney, said she expected “a lot of hurdles” when she filed the case. Aldous said that she will argue that the hospital system was not Pham’s employer.

“This is not a compensation case. THR is not her employer, Presbyterian is,” Aldous said. “It’s not about the care she received. It’s that she shouldn’t have needed the care in the first place.”

Let’s hope she gets around workers comp. Anyone who’s been listening to NPR or following Pro Publica in the past couple days knows what I’m talking about: workers comp has become a horror show for injured workers in this country. Nina Pham, and all injured workers, clearly deserve better than that.

February 21, 2014

Shout out today to the whistleblowers of the world, who are subjected to the worst kind of insults when reporting fraud. Take yesterday’s front page New York Timesstory today about information uncovered through a False Claims Act lawsuit against the Harris School of Business.

This is a for-profit school owned by the Premier Education Group, which “owns more than two dozen trade schools and community colleges operating under several names in 10 states.” Both companies have been sued for “charging more than $10,000 for programs lasting less than a year,” where “school officials routinely misled students about their career prospects, and falsified records to enroll them and keep them enrolled, so that government grant and loan dollars would keep flowing.”

In a separate case in New Jersey, dozens of former Harris students say that the school lied about what professional certifications they would qualify for after completing their courses; some were given a brochure saying they could sit for a dental assistant certification exam — an exam that had not been offered for years. Premier settled a similar case a few years ago before it went to trial.

The former employees’ federal suit also charges that the school enrolled people who should not have been in its programs — like a student enrolled for massage therapy, though he had been convicted of a sex crime, which would prevent him from being licensed. They say the schools enrolled students who had not graduated from high school, though their programs required it, including some who presented diplomas from known fraudulent “diploma mills.”…

The most striking allegations against Premier involve students who were not capable of doing the work because they lacked the mental stability, academic skills or English proficiency, yet were kept on the books so the schools could collect their federal aid, which requires that a certain percentage of students make progress toward completion. When teachers gave them failing marks, the former employees charge, administrators changed the grades and falsified the attendance records.

Ms. Amaya, [one of the whistleblowers], said she was promoted by Harris, and then fired for insisting on following the rules.

The company’s response? To call the lawsuits “frivolous” and to question the motives of those who blew the whistle: “Jonathan D. Farrell, a lawyer for the company, said some of the people suing the company 'may have financial motives,' while others are resentful over being dismissed, and 'some are misguided.'"

So let’s be clear how effective the False Claims Act has been providing people the opportunity to blow the whistle on corporate fraud and abuse – so much so that the U.S. Chamber of Commerce has made it part of their mission to destroy this law, despite how much money taxpayers have recovered. (See, e.g., today’s story about the whistleblower lawsuit against Tenet Healthcare and some of its hospitals in Georgia and South Carolina, charging that obstetric clinics referred women to hospitals in exchange for kickbacks from fraudulent Medicare and Medicaid claims – a scheme that “went on for more than a decade.” )

But check out this shocking Washington Poststory about “one of the nation’s largest government contractors,” which is “requir[ing] employees seeking to report fraud to sign internal confidentiality statements barring them from speaking to anyone about their allegations, including government investigators and prosecutors." This is according to a lawsuit just filed.

Attorneys for a whistleblower suing Halliburton Co. and its former subsidiary, Kellogg Brown & Root, said the statements violate the federal False Claims Act and other laws designed to shield whistleblowers.

“The apparent purpose and intent of the confidentiality agreements was to vacuum up any potential adverse factual information, conceal it in locked file cabinets and gag those with first-hand knowledge from going outside the company,” Stephen M. Kohn, an attorney for the whistleblower, wrote in the complaint.

Between 2002 and 2011, KBR was the largest U.S. contractor operating in Iraq and Afghanistan, winning nearly $40 billion worth of federal work, according to the U.S. Commission on Wartime Contracting in Iraq and Afghanistan. KBR has been the subject of numerous lawsuits and allegations of fraud relating to contracts with the U.S. government, according to the war commission and the Justice Department.

Tim McCormack, a lawyer who specializes in whistleblower cases, said that he has seen numerous confidentiality agreements but that the one used by KBR is particularly stark because it threatens employees with termination and possible legal action if they speak out.

“This is mostly about trying to scare someone into not talking,” McCormack said. “It’s very effective to say you will be fired or sued. This is a very big company with lots of resources.”

January 08, 2014

This morning, Tom Donahue, head of the U.S. Chamber of Commerce, the nation’s first “billion dollar baby” when it comes to total lobbying expenditures, gave a speech identifying two ways it would like Congress to harm the injured. First, it would like the Senate to pass the House-passed bill,

H.R. 982, the so-called “Furthering Asbestos Claim Transparency Act” (FACT Act), [which] does two things: 1) it requires asbestos trusts to disclose on a public web site private, confidential information about every asbestos claimant and their families, including their names, addresses, where they work, how much they make, some medical information, how much they received in compensation and the last four digits of their social security numbers; and 2) it allows any defendant in any asbestos lawsuit the right to demand any information about any asbestos victim from any asbestos trust at any time for any reason.

Second, it would like Congress to pass a law to help companies defraud the government. Or at least make it harder for the government to stop them. This is what they call “reasonable reforms in the False Claims Act.”

Many false claims cases these days involve pharmaceutical companies like the one against GlaxoSmithKline, which paid $750 million to settle criminal and civil complaints stemming from a suit first filed by a whistleblower for selling 20 drugs manufactured at a contaminated plant in Puerto Rico (since shut down).

Leave to the U.S. Chamber of Commerce to have a problem with outcomes like this.

And speaking of government cases against corporate offenders, today “strange bedfellows” Sen. Elizabeth Warren (D-MA) and Sen. Tom Coburn (R-OK) introduced legislation to “force enforcement agencies to provide more details about deals to resolve corporate misconduct by U.S. companies.”

Now granted, most of their issues are with legal settlements with the financial firms that ruined the economy. WritesYahoo News:

When the Justice Department announced a $13 billion deal with JPMorgan Chase & Co. in November that included a $2 billion penalty to resolve a civil fraud investigation into flawed mortgage bonds, for example, it did not lay out the specific charges or explain how that penalty was calculated.

It did release a "statement of facts" that described some of the bank's harmful conduct.

"When government agencies reach settlements with companies that break the law, they should disclose the terms of those deals to the public," Warren said in a statement.

"Increased transparency will shut down backroom deal-making and ensure that Congress, citizens and watchdog groups can hold regulatory agencies accountable," she said.…

The bill would require federal agencies to explain whether any portion of a settlement is tax deductible and to publish other details of the agreements, including the claims settled and how payments were classified.

The bill applies to any settlements larger than $1 million.

But between the Chamber's speech and this bill, the poor government just cannot catch a break today!

January 18, 2013

In her always hilarious New York Times column, the brilliant Gail
Collins wrote yesterday:

"But we still need to wring a useful
lesson out of all this [i.e., the Lance Armstrong confession]. Let’s consider
the U.S. Postal Service Pro Cycling Team. Between 1996 and 2004, our American
mail system invested an estimated $40 million in this venture, in return for
which Armstrong and his teammates rode around with the Postal Service insignia
on their shirts.

This would be the same Postal
Service that lost $16 billion last year, and I believe I speak for every
stamp-buyer in the nation when I say: What?"

I sure hope the post office gets its money back, if only to
stop its most recent junk mail fundraising scheme. Everybody else is sure gonna
try. And indeed, the U.S. Justice Department has already been negotiating with
Armstrong over a federal whistleblower lawsuit brought by Armstrong’s former teammate Floyd Landis,
alleging “that Armstrong and team managers defrauded the U.S. government when
they accepted money from the U.S. Postal Service.” (See more details here.)

The suit stems from the Postal Service
contract, which “required that the team refrain from using
performance-enhancing drugs” and the now undeniable fraud amounts to a violation of the Federal
False Claims Act. This suit could
cost Armstrong nearly $100 million, and if he does lose, I sure hope all the money gets earmarked for the U.S. Postal Service. But unfortunately, Armstrong apparently
defrauded many people and companies who also want their cut – like insurance
companies - so its unclear what damages might be available for any of these parties.

Oprah Winfrey interviewed Lance Armstrong under camera
lights this week, but Dallas attorney Jeffrey Tillotson is the only person to
have interviewed the disgraced cyclist under oath. He could also be the first
to sue Armstrong after his confession to Winfrey.

Tillotson said there could be a lawsuit as early as Friday
on behalf of his client, Dallas-based SCA Promotions, a sports insurance
company. SCA had to pay Armstrong bonuses for three Tour de France victories on
behalf of Tailwind Sports, which owned the U.S. Postal Service team for which
Armstrong raced. …

Tillotson questioned Armstrong in Austin on Nov. 30, 2005,
during a deposition resulting from SCA Promotions’ attempts to keep from paying
the cyclist $12 million for winning the Tour de France in 2002, 2003 and 2004.
SCA had insured the bonuses on behalf of Tailwind Sports.

Then there is the suit by Britain's Sunday Times, owned
by Rupert Murdoch's News Corp, which has already filed legal papers over the
$500,000 it paid to Armstrong in 2006 to settle a libel lawsuit “after it reprinted claims from a
book in 2004 that he took performance-enhancing drugs.” It wants its money back, interest
and costs –about $1.6 million.

After retiring from professional cycling following his
seventh tour win, Armstrong launched his much-publicized racing comeback at the
Tour Down Under in 2009 and also competed in the event the following two years.

The SA government has never detailed just how much he was
paid for his appearances, which dramatically increased national and
international interest in the race.

Mr. Weatherill said the government would continue to keep
the figure secret as disclosing the amount would reveal to others just how much
the government was prepared to pay in support of major events.

Like, say, the U.S. Post Office? And here is another idea. How about ending these government/sports sponsorship deals. As Gail Collins put it,

There still are sponsorship deals floating all around the
federal government. (The Army has one with the National Hot Rod Association.)
Nobody seems to keep track of exactly how much they add up to. Maybe this one
little area could be a staging ground for bipartisan accord. Republicans and
Democrats could join together to ban the use of federal taxpayer dollars for
sponsorship of sports events. Then they would be so pleased with their progress
that they could move on and pass a genuine budget. The Lance Armstrong debacle
would have a point!

“What we’re learning is that money doesn’t deter corporate malfeasance,” said Eliot Spitzer, who, as New York’s attorney general, sued GlaxoSmithKline in 2004 over similar accusations involving Paxil. “The only thing that will work in my view is C.E.O.’s and officials being forced to resign and individual culpability being enforced.”

Resign – and jail, we should add. One can hardly argue with this point of view. The fine itself, “for promoting its best-selling antidepressants [Paxil and Wellbutrin] for unapproved uses and failing to report safety data about a top diabetes drug [Avandia]” as well as “civil penalties for improper marketing of a half-dozen other drugs” barely even cuts into the company’s sales revenue for these drugs:

Avandia, for example, racked up $10.4 billion in sales, Paxil brought in $11.6 billion, and Wellbutrin sales were $5.9 billion during the years covered by the settlement, according to IMS Health, a data group that consults for drugmakers.”

“So a $3 billion settlement for half a dozen drugs over 10 years can be rationalized as the cost of doing business,” said [Patrick Burns, spokesman for the whistle-blower advocacy group Taxpayers Against Fraud].

Mr. Burns and others have said that to institute real change, executives must be prosecuted criminally or barred from participating in the Medicare and Medicaid programs, an action known as “exclusion.”

This has occurred in only a handful of cases, and rarely in a case involving a major pharmaceutical company.

Need more evidence that deterrence hasn't yet worked? Just take a look at the recent history of this company since Spitzer's 2004 lawsuit, a company that made over $30 billion in profits last year and whose CEO took in multi-millions in compensation:

In October 2010, GSK “agreed to pay $750 million to settle criminal and civil complaints that the company for years knowingly sold contaminated baby ointment and an ineffective antidepressant.…Altogether, GlaxoSmithKline sold 20 drugs [including Avandia, Paxil Coreg, a heart drug, and Tabamet for acid reflux] that were made at a huge plant in Puerto Rico that for years was rife with contamination.” The total includes “a $150 million payment to settle criminal charges [which] was the largest such payment ever by a manufacturer of adulterated drugs,” as well as “$600 million in civil penalties. The share to the whistle-blower will be $96 million, one of the highest such awards in a health care fraud case.”

Speaking of Paxil, in July 2010, the company settled some 800 Paxil lawsuits for more than $1 billion, because the drug caused birth defects in children of women who took it. This settlement, “which would provide an average payout of more than $1.2 million to families of the affected children, leaves more than 100 similar cases pending. The birth-defect settlements bring to more than $2 billion the amount Glaxo has agreed to pay to resolve a variety of Paxil-related suits, including claims the pill caused suicides or attempted suicides and addiction problems….”

In May 2007, GSK settled a $64 million class action brought by parents who were misled about Paxil's safety for their children, with the company later paying an additional $40 million to insurers “who paid for the drug to be used in children and adolescents.”

Speaking of Avandia, in July 2010, GSK also “settled about 10,000 of the roughly 13,000 Avandia lawsuits in the US for approximately $460 million.” Avandia, a Type 2 diabetes drug “has been linked to cardiovascular risk, although an FDA advisory panel … voted to allow the controversial diabetes pill to remain on the market, but with warnings.” What's more, a U.S. Senate Finance Committee investigation revealed that GSK knew about these adverse effects for years and failed in their duty to warn patients.

In September 2006, GSK agreed to pay the IRS approximately $3.4 billion in back taxes, making it the largest single payment made to the IRS to resolve a tax dispute in the agency’s history.

In September 2005, GSK agreed to pay $150.8 million to settle Justice Department charges that the company set “fraudulent and inflated prices” for Zofran and Kytril, injectible anti-nausea drugs for patients undergoing chemotherapy cancer treatment.

More specifically, Giorno and Leah Lorber, GSK's Director of Public Policy, have been part of ALEC’s Civil Justice Task Force attending at least the following recent meetings: July 2010, December 2010, April 2011 and August 2011. This task force's purpose is to wipe out liability for corporate crooks like GSK, among others.

November 30, 2011

The other day, Newt Gingrich called child labor laws “stupid.” We report this not to make a statement about presidential politics, but to show where some people are when it comes to workplace priorities these days. (Or as David Letterman’s put it, "this is the man we need to lead us into the 18th century.")

Safety isn’t much of priority for many firms, which makes Newt’s idea especially wacky. In fact, let’s “Span the World” of OSHA highlights this week (And yes, somebody got hurt.)

For the sixth time, OSHA (that is, the U.S. Department of Labor’s Occupational Safety and Health Administration) has cited a Wisconsin Rapids carbon steel foundry “for overexposing workers to crystalline silica, a known hazardous material.”

for alleged repeat and serious violations of workplace safety standards at its Munnsville manufacturing plant. The lawnmower manufacturer faces a total of $125,000 in proposed penalties, chiefly for mechanical, electrical and fall hazards identified during an inspection begun in June by OSHA's Syracuse Area Office.

The sizable fines proposed in this case reflect both the gravity of these hazards and the fact that several are substantially similar to conditions cited in an earlier OSHA inspection," said Christopher Adams, OSHA's area director for central New York. "It's imperative that this employer not only corrects these latest hazards but also takes effective steps to ensure that they are corrected once and for all."

Down in Hot Lanta, OSHA cited Midsouth Steel Inc., "a general contractor performing steel fabrication and roof decking ... for four safety violations following an inspection that found workers exposed to fall hazards,” specifically, “allowing them to work at heights of 35 feet in an aerial lift without requiring the use of fall protection, exceeding an aerial lift's load capacity and failing to provide fall protection for employees working on a steep pitched roof.” Three of these violations were “willful,” that is, “committed with intentional knowing or voluntary disregard for the law's requirements, or with plain indifference to worker safety and health."

In Illinois, OSHA cited “Igor Jerema Construction Co. in Buffalo Grove for four willful safety violations after a worker applying stucco at a home under construction in Burr Ridge fell off a scaffold and sustained a fatal head injury in May.”

In Texas, OSHA cited "Houston, Texas-based oil and gas drilling contractor Nabors Drilling USA LP for two alleged workplace safety violations after a worker was electrocuted at a Williston job site in May.”

Then of course, there’s retaliation against whistleblowers who report safety violations:

[OSHA] filed a lawsuit against the Angels With Paws animal shelter in Lakewood on behalf of an employee who was terminated in violation of the whistleblower provisions of the Occupational Safety and Health Act. The employee had complained about safety and health hazards to the animal shelter's management before filing a formal complaint about the hazards with OSHA. The employee was later discharged and then filed a whistleblower complaint with OSHA alleging retaliation by the defendants in violation of Section 11(c) of the OSH Act. OSHA's Whistleblower Protection Program conducted an investigation and determined the former employee's allegations had merit.

Mix that all up with a little bit of anthrax in the workplace (the federal government just settled with the family of Robert Stevens, a tabloid photo editor in Florida who was killed after receiving an anthrax letter in 2001), and voila! A perfect place to send the kids!

Here’s the whole Letterman monologue. (As we’ve said before, we take no position on this election, but sometimes, well, we just can't resist the comedy.)

June 10, 2011

A migraine headache can cause intense throbbing or pulsing in one area of the head and is commonly accompanied by nausea, vomiting, and extreme sensitivity to light and sound. Migraine attacks can cause significant pain for hours to days and be so severe that all you can think about is finding a dark, quiet place to lie down.

Put it this way. Migraine sufferers don’t need any more grief in their lives. But it turns out, one pharmaceutical company, which should be figuring out how to help these folks, decided to make things worse for them by lying about a treatment that never worked, just so they could cash in on the migraine market.

Yesterday, the U.S. subsidiary of Belgian manufacturer UCB, which manufactures the epilepsy treatment Keppra, agreed "to pay more than $34 million for marketing the medication to treat migraine headaches in violation of U.S. drug laws.” It also pleaded guilty “to a misdemeanor in connection with the misbranding. … The federal government will get $15.8 million of the civil settlement and nearly $10 million will go to state Medicaid programs.” Writes the New York Times, “The case is among scores of whistle-blower complaints that the Justice Department has brought in recent years against pharmaceutical companies for illegal marketing.”

UCB prepared business plans that recognized the market for off-label uses of Kempra “offered a much higher sales potential than the epilepsy market,” the document states. At the time, UCB was being outspent by competitors who were aggressively pursuing off-label business, according to prosecutors.

UCB’s marketing included sponsorship of doctor-paid “studies,” posters, publications and oral presentations about the supposed benefits of using Keppra to treat migraines. Prosecutors said UCB failed to disclose that a 2000 study showed that Keppra was not effective in preventing migraine….

“UCB put its pursuit of profits ahead of its obligations to patients,” Ronald C. Machen Jr., U.S. attorney for the District of Columbia, said in an e-mailed statement. “Today’s guilty plea and UCB’s $34 million payout should remind drug companies that try to cleverly design off-label marketing schemes that we will not allow them to compromise patient safety.”

Really? A misdemeanor plea will do that? Paying a $34 million penalty, when the company made $1.37 billion in sales last year from this drug alone?

Excuse my cynicism, but I think a little more “deterrence” may be needed here. Any defrauded migraine sufferers out there?

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